The Effective interest rate reference article from the English Wikipedia on 24-Apr-2004 (provided by Fixed Reference: snapshots of Wikipedia from wikipedia.org)

Effective interest rate

In contrast to a nominal interest rate, the period of time after that the interest is credited coincides with the basic time unit (normally one year). Thus, given an interest rate of i, an initial capital is increased by the factor (1+i) after each time unit.

See also:

• Interest
• Interest rate
• Nominal interest rate
• list of finance topics

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